How to cut the cost of motor insurance

The cost of motor insurance varies from company to company. Compare quotes from different insurers to get the best deal. You can contact companies directly or through an insurance broker via the British Insurance Brokers' Association (BIBA). You can also compare premiums on a price comparison website. But remember, do not buy on cost alone – make sure that the policy covers everything you need it to.

Secure your vehicle

Insurers often offer discounts for vehicles fitted with security devices such as alarms or immobilisers – your insurer can tell you which devices they approve. Leaving your vehicle in a garage overnight, rather than out on the street or in your driveway, may also reduce the cost of your premium.

Pay a higher voluntary excess

By paying a higher excess – the first amount of any claim that you agree to pay – you may be able to get a reduced premium.

Limit your vehicle's use

Using your vehicle for professional purposes can push up the price of your premium. Limit your vehicle's use to domestic, social and pleasure pursuits to keep the cost of your insurance down.

Pay your premium up front

Paying your premium in one go at the start of your policy period is usually cheaper than paying it in weekly or monthly installments.

Drive a lower powered car

Your vehicle's engine size is one of the factors insurers use to work out the cost of your premium. Vehicles with lower engine capacities are cheaper to insure than high-powered vehicles. If you are thinking about changing your vehicle, choose a smaller engine size to reduce the cost of your insurance.

Sign up for 'pay how you drive' insurance

Your insurer may offer a ‘pay how you drive’ policy, often known as ‘telematics’ or ‘black box’ insurance. These types of insurance policies use GPS technology to measure how a vehicle is being driven – insurers then use this information to make judgements about driving performance. Insurers will measure things like your speed; distance travelled; the time of day you drive; what kinds of road you usually use; and how you brake and take corners. This information is considered together with other traditional risk factors, such as your age and occupation, to set premiums. If you can demonstrate that you are safe and responsible behind the wheel your insurer may offer you a lower premium.

Build up a no claims discount

Your insurance claims history (how many claims you have made on your policy) affects the price of your motor insurance premium. If you have a claim-free record your insurer will reward you with a no claims discount, which builds up with each claim-free year. No claims discounts vary from insurer to insurer, but they can be as much as 30% for one claim-free year and 60% for five claim-free years. Shop around to find the best deal for you.